Reebok 2010 Annual Report Download - page 84

80 Group Management Report – Our Group Group Strategy
Group Strategy
Our goal as a Group is to lead the sporting goods industry with brands built upon a passion for sports and a sporting lifestyle.
Inspired by our heritage, we know that a profound understanding of the consumer and customer is essential to achieving this
goal. To anticipate and respond to their needs, we continuously strive to create a culture of innovation, challenging ourselves
to break with convention and embrace change. By harnessing this culture, we push the boundaries of products, services and
processes to strengthen our competitiveness and maximise the Group’s operational and financial performance. This, in turn,
will drive long-term value creation for our shareholders.
Creating shareholder value
Creating value for our shareholders
through significant cash flow generation
drives our overall decision-making
process see Internal Group Management
System, p. 126. Therefore, we are focused
on rigorously managing those factors
under our control, making strategic
choices that will drive sustainable
revenue and earnings growth, and
ultimately cash flow. For each of our
segments, we pursue the avenues for
growth which we expect to be most value-
enhancing, with particular emphasis
on improving profitability. In addition,
rigorously managing working capital
and optimising our capital structure
remain key priorities for us. As always,
we are committed to increasing returns
to shareholders with above-industry-
average share price performance and
dividends.
Presentation of Route 2015
In November 2010, the Group unveiled
its 2015 strategic business plan named
“Route 2015”. This plan is the most
comprehensive the adidas Group has ever
prepared, incorporating all brands, sales
channels and Group functions globally.
Based on our strong brands, premium
products, extensive global presence and
our commitment to innovation and the
consumer, we aspire to outperform total
market growth (both GDP and sporting
goods market) and to grow our bottom
line faster than our top line. In addition,
the Group plans to lay the foundation for
leadership in the sporting goods industry
by outgrowing our major competitor
over the next five years. The plan aims
at growing the revenues of the adidas
Group by 45% to 50% currency-neutral
from 2010 to 2015. In addition, the Group
targets a compounded annual earnings
growth rate of 15% and aims to reach an
operating margin of 11% sustainably by
2015 at the latest see Subsequent Events
and Outlook, p. 174. To achieve these goals,
we have made strategic choices and will
prioritise our investments under our six
key strategic pillars see 01.
Diverse brand portfolio
Consumers want choice. Whether it is
the athlete looking for the best possible
equipment, or the casual consumer
searching for the next fashion trend,
we are inspired to develop and create
experiences that engage consumers
in long-lasting relationships with our
brands. To maximise our consumer
reach, we have embraced a multi-brand
strategy.
No matter in which market we operate,
we recognise that consumer buying
behaviour and the retail landscape are
unique. Therefore, to fully exploit market
opportunities, we tailor our distribution
strategy to present our brands to the
consumer in the most impactful way.
This is achieved by following a distinctive
but coordinated channel approach.
To this end, we strive to provide our
customers with superior service to
secure prime shelf space for our brands,
while continuing our commitment to
building a strategic competency in own
retail and e-commerce see Global Sales
Strategy, p. 82.
Creating a flexible supply chain
Speed and agility are key to outpacing
the competition. We are committed to
meeting the full range of customer and
consumer needs by ensuring product
availability in the correct size and colour,
providing game-changing technical
innovations and also the latest high-end
fashion product to the highest quality
standards.
This approach allows us to tackle oppor-
tunities from several perspectives, as
both a mass and a niche player, providing
distinct and relevant products to a wide
spectrum of consumers. In this way, each
brand is able to keep a unique identity
and focus on its core competencies, while
simultaneously providing our Group with
a broad product offering, increasing our
leverage in the marketplace see Global
Brands Strategy, p. 87.
Investments focused on highest-
potential markets and channels
As a Group, we target leading market
positions in all markets where we
compete. However, we have prioritised
our investments based on those
markets which offer the best medium-
to long-term growth and profitability
opportunities. In this respect, we
continue to place a considerable
emphasis on expanding our activities in
the emerging markets, particularly China
and Russia, as well as building market
share in underpenetrated markets such
as the United States see Subsequent
Events and Outlook, p. 174.